Creso welcomes Canada’s proposed cannabis tax regime

By Megan Graham. Published at Nov 13, 2017, in ASX Biotechs

Creso Pharma (ASX:CPH) has welcomed the weekend’s announcement from the Trudeau government in Canada, proposing a tax of C$1 per gram of legalised recreational marijuana. The announcement states that the tax should not exceed C$1 per gram, or 10 per cent of the producer’s price.

CPH has worked steadily to establish a strategic position in Canada, with the recent purchase of Mernova Medical in Nova Scotia.

The announcement from the Canadian government is yet further evidence of the country’s progressive stance on the legalisation of medical and recreational marijuana. Considering its status as world leader in this area, CPH could be set to benefit from the country’s fast-moving progress sooner rather than later.

The Canadian government sees the low level of tax as a way to quash the black market for recreational marijuana, and entice people to opt for government-controlled sources instead. The tax revenue from this initiative is projected to reach C$1 billion per year.

CPH’s recent purchase of Mernova Medical, in Nova Scotia, was a strategic move by the company on several fronts — including an increased scalability into the future. Construction has now commenced for the 20,000 square foot cannabis growing facility at the site which can be scaled up to a 200,000 square foot facility. The below photo indicates the capacity CPH will have to work with at the site.

Creso nova scotia

The purchase will see CPH become one of the few companies in the world, and the only medical cannabis company on the ASX, with 100 per cent ownership that includes the capacity to commercially cultivate and extract cannabis and hemp in the Canadian federally regulated environment.

Of course this is speculative stock and investors should seek professional financial advice if considering this stock for their portfolio.

S3 Consortium Pty Ltd (CAR No.433913) is a corporate authorised representative of LeMessurier Securities Pty Ltd (AFSL No. 296877). The information contained in this article is general information only. Any advice is general advice only. Neither your personal objectives, financial situation nor needs have been taken into consideration. Accordingly you should consider how appropriate the advice (if any) is to those objectives, financial situation and needs, before acting on the advice.

Conflict of Interest Notice

S3 Consortium Pty Ltd does and seeks to do business with companies featured in its articles. As a result, investors should be aware that the Firm may have a conflict of interest that could affect the objectivity of this article. Investors should consider this article as only a single factor in making any investment decision. The publishers of this article also wish to disclose that they may hold this stock in their portfolios and that any decision to purchase this stock should be done so after the purchaser has made their own inquires as to the validity of any information in this article.

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The information contained in this article is current at the finalised date. The information contained in this article is based on sources reasonably considered to be reliable by S3 Consortium Pty Ltd, and available in the public domain. No “insider information” is ever sourced, disclosed or used by S3 Consortium.

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